In the first large-scale urban assault of the conflict, rebels from the Movement for Oneness and Jihad in West Africa (known by its French initials MUJAO) attacked Malian troops in central Gao, sending residents running for cover. Gunfire resounded late into Sunday afternoon before dying down in the evening, when a power cut plunged the city into darkness.

Taking cover … a French soldier peers around a corner during gun battles with insurgents in Gao. Photo: AP

A French attack helicopter circled over the governor's offices and the central police station, the focal points of the attack. French and Malian forces conducted joint patrols, warning residents snipers could be hidden in the city.

MUJAO, one of the al-Qaeda-linked groups that seized control of northern Mali for 10 months after a military coup in March last year, claimed the attack and a suicide bombing on Saturday, its second in two days.

Shell shock ... Malian people mill through the heavily shelled police station in Gao. French and Malian government forces have regained control of this northern city, after Islamic fighters fought a prolonged battle. Photo: AP

A witness said the gunmen had hidden in the empty police station, then attacked Malian soldiers when they arrived.

When reinforcements came, snipers hidden in surrounding buildings opened fire on them, the witness said.